HomeBusiness3 Artificial Intelligence (AI) Stocks That Could Go Parabolic

3 Artificial Intelligence (AI) Stocks That Could Go Parabolic

If you’re like me, you don’t remember much from high school geometry class. However, I do remember a few things, including the intriguing curve called the parabola.

We don’t come across the good old parabola very often in adult life. But investors may have a chance to see the geometry in action in a select group of stocks. These three artificial intelligence (AI) stocks (listed in descending order by market cap) could go parabolic with rapid price appreciation over a short period of time.

1. UiPath

So far in 2024 the trajectory of UiPath‘S (NYSE: PAD) stock looks more like the left side of a parabola, which slopes downward. Shares of software company Robot Process Automation (RPA) are down by a double-digit percentage.

However, this decline does not reflect major problems for UiPath. The company reported record revenue of $405 million in the quarter ended January 31, up 31% year over year.

UiPath also achieved its first quarter of profitability under generally accepted accounting principles (GAAP) since going public in April 2021.

Cathie Wood’s ARK Invest predicts that AI software could become a $14 trillion market by 2030, up from less than $1 trillion in 2022. UiPath should be in a prime position to benefit from this massive growth.

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Everest Group ranked the company’s business automation platform as the highest in capabilities, market impact and vision.

UiPath’s relatively low market cap of around $11 billion also gives the company plenty of room to grow. ARK Invest considers the company part of the ‘AI’s sleeper wave’, i.e. promising AI companies that are not as widely followed as the mega-cap giants. It thinks UiPath’s ease of use and scalability give it a competitive advantage in the AI ​​automation market.

2. BigBear.ai Companies

AI-powered decision intelligence software company BigBear.ai Holdings (NYSE: BBAI) already went parabolic earlier this year and more than doubled in early March. However, the stock has since given up all of these gains and then some.

Some on Wall Street think BigBear.ai is poised for a big recovery. The average 12-month price target for the stock reflects an upside potential of 124%. One analyst predicts that the share price could more than triple in the next twelve months.

This optimism is not based on the latest financial performance. The company’s revenue fell 21.4% year over year in the first quarter of 2024. BigBear.ai posted a net loss of $125.1 million in the quarter.

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However, the company has gained momentum with recent contracts, including an $8.3 million extension of an agreement with the U.S. Army. It also recently completed the acquisition of vision AI leader Pangiam.

3. Tribe

Rod (NYSE: STEM) is the smallest company on this list with a market cap of just over $200 million. It’s also the group’s worst performance this year, down nearly 70%.

The supplier of battery systems and AI software for smart energy reported a 62% year-on-year revenue decline in the first quarter and sharply deteriorating profits.

Can Stem turn the tide? Several analysts think so. The average twelve-month price target for the stock is almost 240% above the current share price. The most optimistic analyst surveyed by LSEGowner of the London Stock Exchange, thinks the stock could skyrocket more than 8.5 times.

Stem has canceled some of its less profitable contracts to focus on others with higher margins. The company expects these steps to improve profitability. The recent introduction of the PowerTrack Asset Performance Management suite for managing storage, solar and hybrid energy portfolios could also fuel accelerated growth.

There’s no guarantee this stock (or UIPath or BigBear.ai for that matter) will go parabolic. But according to Statista, the global market for energy storage systems is expected to nearly double to $506.5 billion by 2031. If Stem can capitalize on this huge opportunity, it could return to its winning ways from a few years ago.

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Should you invest $1,000 in Stem now?

Please consider the following before purchasing shares in Stem:

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Keith Speights has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Stem and UiPath. The Motley Fool has a disclosure policy.

3 Artificial Intelligence (AI) Stocks That Could Go Parabolic was originally published by The Motley Fool

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